Celsius applies for bankruptcy protection, CEO: Historically correct decision, optimistic about the platform's future

Since suspending withdrawals on 6/13, despite the legal team's recommendation to apply for bankruptcy protection, Celsius has continued to repay on-chain debts at all costs, even introducing a "HODL" mode and seeking user support to avoid bankruptcy liquidation. However, ultimately succumbing to debt pressure, they have applied for bankruptcy and initiated financial restructuring.

Liabilities Could Reach Nearly Billions

According to court documents and an official press release, Celsius has filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. It is estimated that there are over 100,000 creditors, with reported assets between $1 billion and $10 billion and estimated liabilities of the same amount. A financial restructuring will be carried out to return assets to users.

Note: The above "official data" is the same as that of the cryptocurrency broker Voyager, which has also filed for bankruptcy protection.

The largest unsecured creditors are:

• Pharos USD Fund SP
• Pharos Fund SP

Other designated creditors include:

• ICB Solutions
• Caen Group LLC
• Alameda Research
• B2C2
• Covario AG

The law firm Kirkland & Ellis LLP will represent Voyager, with eight entities related to Celsius declaring bankruptcy. Celsius claims to have $167 million in cash, emphasizing that this will provide sufficient liquidity for the bankruptcy process.

Founder: Company Will Be Stronger

CEO and founder Alex Mashinsky has been largely absent on social media, only retweeting relevant announcements. However, in the press release, he stated:

This is the right decision for our community and Celsius. We have a strong, experienced team to guide Celsius through this process, and we believe that when we look back at Celsius' history, we will see this as a defining moment, taking decisive and confident action to serve the community and further strengthen Celsius' future.

Chapter 11 bankruptcy protection is aimed at allowing companies to undergo financial restructuring, fulfill obligations to creditors, and continue operations. Typically, a reorganization plan approved by creditors and supervised by legal teams is implemented.

In a statement, Celsius emphasizes that many well-known companies have successfully restructured under Chapter 11 and emerged stronger, including American Airlines, Delta Air Lines, General Motors, Hertz, and Marvel, among others.

Users Still Unable to Withdraw Funds

Celsius states that in order to reorganize, under Chapter 11 bankruptcy, Celsius must prioritize paying employee salaries and protecting their interests before allowing users to withdraw funds. Therefore, Celsius is not yet allowing users to withdraw funds.

Some in the community criticize this, arguing that opting for Chapter 11 bankruptcy is to prioritize the interests of the company owners at the expense of users. However, under bankruptcy law, if the Chapter 11 route fails, the process will still move to Chapter 7 to liquidate company assets and distribute proceeds to creditors.